BDL Instructs Banks to raise capital by up to 20% by the end of June 2020

On November 4th, Lebanon’s central bank issued a circular instructing local lenders to raise their capital (common equity tier one) by 10% before the end of the year and a further 10% by the end of June 2020 with a total of $4.1B. It also asked banks not to distribute dividends for the 2019 financial year. Worth mentioning that the capital increase will be done through cash contributions targeting mostly existing shareholders and not through a public offering of shares. Amid the current Lebanon’s political and economic crisis, the decision came in effort to boost liquidity by attracting dollars from abroad, and preventing capital outflow.

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